The Makati City Metropolitan Trial Court (MTC) has acquitted former Banco Filipino Savings and Mortgage Bank (BFSMB) officers Roberto Afable and Francisco Rivera of criminal charges for alleged falsification of public documents and issuing false statements.
In a ruling dated December 15, 2023, MTC Presiding Judge Niño Delvin Embuscado cleared Afable and Rivera of the complaints for lack of sufficient evidence.
Afable served as senior vice president, while Rivera was a director of the BFSMB.
“While there is evidence that there might (be) falsification as impressively argued by the prosecution, however, there is also evidence on the part of the defense, which the prosecution failed or was amiss in covering, supported the defense of both the accused,” the decision stated.
The Bangko Sentral ng Pilipinas (BSP) earlier ordered the closure of BFSMB, claiming the respondent “window-dressed” or manipulat4ed its financial records from 2003 to 2009, to conceal operating losses.
“The difference in the supposed accounting treatment of the entries between the complainant BSP and Banco Filipino does not equal falsification especially when the entries were entered by the latter under the circumstances it was in during the times pertinent to the cases herein,” the ruling read.
The BFSMB argued that the BSP and the Monetary Board knew of the bank’s accounting treatment of its accumulated operating losses, as evinced by the revisions of its business plan from 2004 and its eventual approval in 2009.
The BSP ordered BFSMB’s closure on March 17, 2011, and placed it under the receivership of state-run Philippine Deposit Insurance Corp. (PDIC) as its liabilities topped its assets by P8.4 billion.
The central bank also alleged that the BFSMB had engaged in the so-called Ponzi scheme, funding withdrawals using later deposits, as it lured depositors by offering an interest of six percent to 14 percent for special savings while other banks were paying only 1.8 percent to 3.3 percent.
The MTC noted that there were no untruthful statements in the bank’s financial records, and that BFSMB did not misreport its financial conditions.
The trial court raised significant doubts as to the validity of BSP’s accusations. First, the BSP itself designated comptrollers or monitors at the BFSMB, whose task was to oversee the bank’s day-to-day operations.
This involves the duty to “pass-upon” all transactions of the bank, ensuring compliance with banking laws and regulations. However, as confirmed by BSP’s own witness, despite the comptroller’s duty to report unsafe banking practices and attend all BFSMB meetings, there was no evidence on record that would show that any adverse report was ever made to the BSP regarding the alleged misreporting of accumulated operating losses of BFSMB by the BSP designated comptroller.
It was proven during trial that the BSP and its Monetary Board were “well-aware” of BFSMB’s accounting treatment of its accumulated operating losses, as indicated by the multiple revisions of BFSMB’s business plan from 2004, until its eventual approval in 2009.
The trial court ruled that there was transparency in BFSMB’s intentions and willingness to collaborate with the BSP and tat the Monetary Board approved regulatory reliefs, affirming the acceptability of BFSMB’s accounting treatment of accumulated operating losses.
This decision came several months after various courts in Makati City dismissed a total of 17 criminal complaints for estafa and five complaints for commission of unsafe and unsound banking practices filed by the Philippine Deposit Insurance Commission against the BFSMB officers.
